The World Trade Organization in the New Global Economy

The World Trade Organization in the New Global Economy

Trade and Investment Issues in the New Millennium Round

New Horizons in International Business series

Edited by Alan M. Rugman and Gavin Boyd

Despite the disruption of the multilateral trade talks at Seattle in December 1999, the work of the World Trade Organization (WTO) continues. The trade and investment issues that have been outstanding since the Seattle events are explored in this far reaching book. The distinguished contributors combine several analytical approaches for a comprehensive assessment of the trends, problems and opportunities demanding attention in international trade negotiations.

Chapter 7: The EU in the WTO

Robin H. Pedler

Subjects: business and management, international business, economics and finance, international economics

Extract

Robin H. Pedler In the international political economy the European Union (EU), as a large single market with a system of collective management, is comparable with the USA, with which it has strong cultural affinities and substantial structural interdependencies. The Union is enlarging, through the absorption of new members in its immediate environment, and these are attracted by its opportunities as an extensive area in which the transaction costs and risks of foreign trade have been virtually eliminated. In multilateral trade negotiations under the World Trade Organization (WTO) the Union has strong bargaining capabilities, and since the late 1990s these have become more significant because of the decline of the Japanese economy. The Union has a common external commercial policy, shaped through interactions between member governments and between them and the European Commission. Most of these governments are coalitions (the UK is an exception) and in four of the largest member states – France, Germany, Italy and the UK – power is held by Socialist parties. Only in France, however, are there traditional ‘left’ policies that may fuel protectionism. In the other three countries the ruling parties define themselves as ‘centre-left’, committed to the ‘third way’. UK Premier Tony Blair allies himself on important issues with the right-wing premier of the next largest country, Jose Maria Aznar of Spain. Their alliance was a driving force behind the Lisbon summit of March 2000 at which the 15 member governments committed themselves to promote growth and employment through deregulation in goods...

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